Beyond Culture

How to Use the CFA Program Curriculum CFA Institute Learning Ecosystem (LES) Designing Your Personal Study Program Errata Other Feedback Corporate Issuers Learning Module 1 Organizational Forms, Corporate Issuer Features, and Ownership Introduction Organizational Forms of Businesses Organizational Forms of Businesses Sole Trader or Proprietorship Partnerships Limited Companies Key Features of Corporate Issuers Legal Identity Owner–Manager Separation Owner/Shareholder Liability External Financing Taxation Publicly vs. Privately Owned Corporate Issuers Exchange Listing, Liquidity, and Price Transparency Share Issuance Registration and Disclosure Requirements Going from Private to Public Going from Public to Private The Varieties of Corporate Owners Practice Problems Solutions Learning Module 2 Investors and Other Stakeholders Introduction Financial Claims of Lenders and Shareholders Debt Versus Equity Debt Versus Equity: Risk and Return Conflicts of Interest among Lenders and Shareholders Corporate Stakeholders and Governance Shareholders versus Stakeholders Investors Board of Directors Managers Employees Customers Suppliers Governments Corporate ESG Considerations Environmental Factors Social Factors Governance Factors Evaluating ESG-Related Risks and Opportunities Practice Problems Solutions Learning Module 3 Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits Introduction Stakeholder Conflicts and Management Shareholder, Board Director, and Manager Relationships Controlling and Minority Shareholder Relationships Shareholder versus Creditor Interests Corporate Governance Mechanisms Corporate Reporting and Transparency Shareholder Mechanisms Creditor Mechanisms Board and Management Mechanisms Employee Mechanisms Customer and Supplier Mechanisms Government Mechanisms Corporate Governance Risks and Benefits Operational Risks and Benefits Legal, Regulatory, and Reputational Risks and Benefits Financial Risks and Benefits Practice Problems Solutions Learning Module 4 Working Capital and Liquidity Introduction Cash Conversion Cycle Liquidity Primary Liquidity Sources Secondary Liquidity Sources Factors Affecting Liquidity: Drags and Pulls Measuring and Evaluating Liquidity Managing Working Capital and Liquidity Working Capital Management Liquidity and Short-Term Funding Practice Problems Solutions Learning Module 5 Capital Investments and Capital Allocation Introduction Capital Investments Going Concern Projects Regulatory Compliance Projects Expansion of Existing Business New Lines of Business and Other Projects Capital Allocation Net Present Value (NPV) Internal Rate of Return Return on Invested Capital Capital Allocation Principles and Pitfalls Capital Allocation Principles Capital Allocation Pitfalls Real Options Practice Problems Solutions Learning Module 6 Capital Structure Introduction The Cost of Capital Factors Affecting Capital Structure Determinants of the Amount and Type of Financing Needed Determinants of the Costs of Debt and Equity Modigliani–Miller Capital Structure Propositions Capital Structure Irrelevance (MM Proposition I without Taxes) Higher Financial Leverage Raises the Cost of Equity (MM Proposition II without Taxes) Firm Value with Taxes (MM Proposition II with Taxes) Cost of Capital (MM Proposition II with Taxes) Cost of Financial Distress Optimal Capital Structure Target Weights and WACC Pecking Order Theory and Agency Costs Practice Problems Solutions Learning Module 7 Business Models Introduction Defining the Business Model Business Model Features Pricing and Revenue Models The Value Proposition (Who + What + Where + How Much) Business Organization and Capabilities Business Model Types Conventional Business Models Business Model Variations Business Model Innovation Network Effects and Platform Business Models Practice Problems Solutions Glossary